Robertson Group (Construction) Ltd v. Amey-Miller (Edinburgh) Joint Venture & Ors [2005] ScotCS CSIH_89 (22 December 2005)

Robertson Group (Construction) Ltd v. Amey-Miller (Edinburgh) Joint Venture & Ors [2005] ScotCS CSIH_89 (22 December 2005)

The contractual phrase 'all direct costs and directly incurred losses' is to be interpreted in the commercial context as including not only actual outlays but also head office overheads and profit, as the arrangement was intended to protect the contractor from loss during the interim period before a formal contract, and a narrower construction would not make commercial sense.

Citation
[2005] ScotCS CSIH_89
Parties
Pursuer and Respondent: Robertson Group (Construction) Limited; First Defender and Reclaimer: Amey-Miller (Edinburgh) Joint Venture; Second Defender and Reclaimer: Amey Programme Management Limited; Third Defender and Reclaimer: Miller Construction (UK) Limited
Jurisdiction
Scotland
Judgment Date
22 December 2005
Procedural Posture
Reclaiming Motion (appeal) in Commercial Action / Interlocutory Appeal Against Lord Ordinary's Decision Allowing Proof Before Answer
Outcome
Reclaiming motion refused; Lord Ordinary's interlocutor adhered to; cause remitted for further procedure.
Legal Topics
Interpretation of Construction Contracts, Recovery of Direct Costs and Losses, Entitlement to Overheads and Profit, Remoteness of Damage
Contract Law Construction Law Interpretation of Construction Contracts Recovery of Direct Costs and Losses Entitlement to Overheads and Profit Remoteness of Damage

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Parties

Robertson Group (Construction) Limited

Pursuer and Respondent

Amey-Miller (Edinburgh) Joint Venture

First Defender and Reclaimer

Amey Programme Management Limited

Second Defender and Reclaimer

Miller Construction (UK) Limited

Third Defender and Reclaimer

Procedural Posture

Reclaiming Motion (appeal) in Commercial Action / Interlocutory Appeal Against Lord Ordinary's Decision Allowing Proof Before Answer

Legal Issues

  1. 1 Whether 'all direct costs and directly incurred losses' in the contract includes head office overheads and profit or is limited to actual outlays
  2. 2 Proper construction of the temporary contractual arrangement pending formal contract

Ratio Decidendi

The contractual phrase 'all direct costs and directly incurred losses' is to be interpreted in the commercial context as including not only actual outlays but also head office overheads and profit, as the arrangement was intended to protect the contractor from loss during the interim period before a formal contract, and a narrower construction would not make commercial sense.

Court Disposition

Reclaiming motion refused; Lord Ordinary's interlocutor adhered to; cause remitted for further procedure.

Orders

  • Refusal of reclaiming motion
  • Adherence to Lord Ordinary's interlocutor